This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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If your expense includes an amount of goods and services tax (GST), the GST is part of the total expense and is therefore part of any deduction. For example, if you incurred union fees of $440 which included $40 GST, you claim a deduction for $440.

If you received a PAYG payment summary - foreign employment then any deductions that you are entitled to claim in respect of the income shown on that payment summary must be claimed at items D1 to D6, where relevant.

All foreign deductions must be translated (converted) to Australian dollars before you complete this item. More information on how to translate your foreign deductions is available at Foreign exchange (forex) or you can phone 13 28 61 to get information about the exchange rates.

The expense must not be private, domestic or capital in nature. For example, the costs of normal travel to and from work, and buying lunch each day are private expenses. If you incurred an expense that was both work-related and private or domestic in nature, you can claim a deduction only for the work-related portion of the expense.

If you incurred an expense that was capital in nature you may be able to claim a deduction for the decline in value of the depreciating assets you acquired. See Decline in value of a depreciating asset.

If you incurred an expense for services paid in advance, read Advance expenditure to decide what part of the expense is deductible in 2011-12.

You cannot claim a deduction for an expense to the extent that:

someone else paid the expense, or you were, or will be, reimbursed for the expense, and

the payment or reimbursement is a fringe benefit (including an exempt benefit).

You must be able to substantiate your claims for deductions with written evidence if the total amount of deductions you are claiming is greater than $300. The records you keep must prove the total amount, not just the amount over $300.

If the total amount you are claiming is $300 or less, you need to be able to show how you worked out your claims, but you do not need written evidence.

If you have prepaid an amount for a service costing $1,000 or more, and the service extends for a period of more than 12 months or beyond 30 June 2013 (such as a subscription to a journal relating to your profession), you can claim only the portion that relates to the 2011-12 income year. You can also claim the proportion of your pre-paid expenses from a previous year that relate to the 2011-12 income year. For more information, see Deductions for prepaid expenses 2012 (NAT 4170).

If you received an allowance that you showed at item 2 on your tax return, you may be able to claim a deduction for your expenses covered by the allowance but only to the extent that you actually incurred those expenses in producing your employment income and the basic rules discussed on the previous page are satisfied. For example, if you received a tools allowance of $500 and your tool expenses were $300, you include the whole amount of the allowance at item 2 on your tax return and claim a deduction of $300 at item D5.

You may be able to claim a deduction for the decline in value of a depreciating asset which you held during the 2011-12 year to the extent that you used it to produce income that you show on your tax return.

A depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is used. Depreciating assets include items such as tools, reference books, computers and office furniture.

You might be able to claim an immediate deduction for the full cost of depreciating assets costing $300 or less provided certain conditions are met. For more information, see the Guide to depreciating assets 2012.

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We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.